The communiqué states that central banks of various countries are committed to ensuring price stability, and the independence of central banks is “crucial” to achieving this goal; the global economy faces uncertainties arising from “ongoing war conflicts, geopolitical issues, and trade tensions,” emphasizing the importance of strengthening multilateral cooperation. The wording of the communiqué is cautious, not directly mentioning “tariffs,” and the conflicts in regions like Russia and Ukraine are generally referred to as “ongoing war conflicts.” The G20 rotating presidency of South Africa’s Deputy Finance Minister notes that the content of the communiqué has been agreed upon by all members. Powell and U.S. Treasury Secretary Bessent did not attend this G20 senior officials meeting.

As U.S. President Trump launched a trade war and repeatedly criticized and threatened the leadership of Federal Reserve Chairman Powell, the finance ministers and central bank governors of the G20 reached a rare consensus, emphasizing in their joint statement that the independence of central banks is “crucial” to maintaining price stability, collectively expressing support for Powell.

On July 18, local time, the G20 finance ministers and central bank governors held a meeting in South Africa, subsequently releasing the first G20 joint statement since October of last year. The statement clearly indicates:

“Central banks are firmly committed to ensuring price stability, fulfilling their respective missions, and will continue to adjust policies based on data. The independence of central banks is crucial to achieving this goal.”

The G20 statement released this Friday also acknowledges the uncertainties facing the global economy due to “ongoing warfare conflicts, geopolitical and trade tensions,” emphasizing the importance of strengthening multilateral cooperation. Although the over 2,000-word statement does not directly use the term “tariff,” the impacts of trade tensions are woven throughout.

Masondo, the Deputy Finance Minister of South Africa, the G20 rotating presidency, stated that the outcomes included in the statement “have been agreed upon by all (G20) members,” focusing on “strategic macroeconomic issues.”

German Finance Minister Scholz referred to the statement as “a significant achievement of the G20 rotating presidency,” noting that the presidency conducted the negotiations with prudence and skill, reaching the statement amid the current complex environment, which “sent a strong signal in support of multilateralism.”

The independence of central banks has become a focal issue.

The independence of central banks became the core topic of this meeting. Lesetja Kganyago, the Governor of the South African Reserve Bank, stated at the press conference after the G20 closing that the issue of independence was “strongly reflected in the dialogue.”

The G20 communiqué clearly supports central banks in various countries to strongly ensure price stability according to their respective responsibilities and will continue to adjust policies in a data-driven manner.

The above statements are seen as support for Powell. Since Trump took office this year, he has attacked Powell multiple times for the Federal Reserve’s inaction, openly calling him a “fool,” claiming that the U.S. does not have high inflation, and demanding significant interest rate cuts. This week, he even hinted that Powell could be fired due to improper handling of the Federal Reserve headquarters renovation project. After Tuesday’s release of the U.S. CPI, Trump again urged the Fed to act immediately, stating that rates should be cut by 3 percentage points.

Against the backdrop of repeated pressure from Trump, the consensus among G20 officials to emphasize independence is even more commendable, as the U.S., as the wealthiest member of the G20, is undergoing a dramatic policy shift that tests the world order established after World War II.

Powell and U.S. Treasury Secretary Bessent, who was visiting Japan, were absent from this G20 meeting, with Federal Reserve Vice Chair Jefferson and Acting Deputy Secretary of the Treasury Michael Kaplan representing the United States at the conference.

Trade tensions are affecting global growth.

The communiqué acknowledges that the global economy faces complex challenges such as “geopolitical and trade tensions” and states:

“The global economy faces increasing uncertainty and complex challenges, including ongoing wars and conflicts, geopolitical and trade tensions. We emphasize the importance of strengthening multilateral cooperation to address existing and emerging risks to the global economy.”

This communiqué is five pages long, and the term “tariff” is not used anywhere in the text, only indirectly mentioning the impact of tariffs with the phrase “trade tensions.”

However, Trump’s tariff policy has reshaped global trade rules. For more than three months, the Trump administration has not only imposed a 10% so-called baseline tariff on all U.S. imports, but also a tariff as high as 50% on steel and aluminum and a 25% tariff on car products. The International Monetary Fund (IMF) lowered the global growth forecast for 2025 from 3.3% in January to 2.8% in April this year.

At the end of the meeting, IMF First Deputy Managing Director Gopinath stated that financial conditions have improved, but it is important to remain vigilant. The IMF will update its global economic outlook at the end of July, stating that “downside risks continue to dominate the outlook, and uncertainty remains high.”

The communiqué reiterates the importance of the World Trade Organization (WTO) in promoting trade issues, while acknowledging that “the WTO faces challenges and requires meaningful, necessary, and comprehensive reforms.”

Multilateral cooperation still receives consensus support, but the wording is cautious.

Despite differences, the G20 still reached a consensus on several issues. The communiqué pledges to address the debt vulnerability of middle- and low-income countries through a “predictable, timely, orderly, and coordinated approach,” further strengthening the implementation of the G20 common framework.

On climate issues, the communiqué does not directly use the phrase “climate change,” but states: “Frequent extreme weather events and natural disasters have affected economic growth, finance, and price stability.”

The communiqué also does not mention the Russia-Ukraine conflict or the conflict between Israel and Hamas in Gaza, but rather refers to it generically as “ongoing war conflicts.”

Josh Lipsky, the chair of international economics at the Atlantic Council, commented that the “biggest news” from the latest G20 summit is that they issued a joint communiqué instead of just a statement from the host country, signaling Bullish Signals during the year the U.S. will serve as rotating president. This indicates a certain momentum.

Editor/danial